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With gas prices rising at the pump an average of $0.50 in the last month, a lot of people are talking about oil prices. While natural gas prices have been in a slump, crude oil prices have been steadily rising.

There has been an increase in global demand of oil as India and China become more industrialized. Oil prices at the time of this writing are at $93.11 per barrel. Oil production and consumption is increasing, too. And all crude oil must go through the refining process, making oil refineries solid investment vehicles.

Each of these companies has had an excellent 12-month stock price gain, but they also have strong earnings with low price-to-earnings multiples. This is a conservative industry, and investors price each of these companies accordingly. The industry average P/E for oil and gas refining and marketing is 15, making these three companies’ earnings relatively inexpensive for investors.

Their history of performance has led each of these companies’ shares to be primarily held by institutional investors:

Company

% Held by Institutions

Valero Energy

85.5%

Marathon Petroleum

84.4%

HollyFrontier

91.8%

In short, these are three strong companies that attract the “smart” money. But what are they really worth?

Each of these companies has undergone a drastic increase in earnings over the last three years. But in the next two years, earnings aren’t expected to sustain their previous momentum.